[SMM Analysis] Global institutions report production expectations for next year copper supply growth may slow down-Shanghai Metals Market

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[SMM Analysis] Global institutions report production expectations for next year copper supply growth may slow down

Translation 05:46:37PM Nov 22, 2018 Source:SMM

SMM, 22 Nov: due to the impact of large-scale mine strikes and other factors, global copper production fell sharply in 2017. SMM expects copper supply growth to increase to 3.3 percent in 2018 from minus 1.0 percent in 2017. Copper supply growth is expected to slow again to about 2.4 per cent in 2019, with mineral copper increasing by about 500000 tons. The main factor is Grasberg, the world's second-largest copper producer, which expects copper production to fall next year, mainly as a result of the transformation of mines. The largest increment is the Cobre Panama mine owned by First Quantum, which is expected to be 150000 tons.

As the mode of operation of the Grasberg copper mine in Indonesia is gradually shifting from open-pit mining to underground mining, according to SMM, Grasberg production will be greatly affected, which has long been expected by the market, but because the progress of underground mining is not controllable and the trend of prices is not clear. In the face of many disturbances, there is no exact reduction, 300000 tons of production reduction is expected to be pessimistic, SMM expects Grasberg to reduce production by 20-300000 metal tons in 2019. Many market participants believe that the copper market will face a shortage of supply.

Fitch: the steady growth of copper production in Chile in 2019 and the decline of ore grade is a cause for concern.

Fitch said in a recent report that Chile would achieve a steady production growth of 4 per cent next year because the risk of labour strikes would be reduced and mines would escalate, warning that falling ore grades pose a downside risk to its long-term forecasts. Fitch said Chilean copper production is expected to increase by 2 per cent to 5.4 million tons in 2018 as a result of increased production at major mines.

Despite the decline in ore grade, Codelco2018 copper production increased slightly in the first half of the year, up 2.8 per cent from the first half of 2017. Fitch stressed that the new Chuquicamata underground mine will support Codelco's copper production level. The underground part of the mine will initially increase land production in Chuquicamata, as the mine will shift to underground operations within the next decade. The current plan predicts that it will take seven years of growth before full production can be achieved. Once fully operational, the underground portion will produce 320000 tons of copper a year.

In addition, Fitch reported that the Michilla mine, owned by Haldeman Mining and to be restarted, showed an improvement in investor interest in Chilean mines. The mine will be restarted in 2019 and, as a medium-sized mine, will produce 170000 tons over the next decade. Antofagasta increased its copper production guidance from 705000 tons to 72.5 tons in 2018 to 750000 to 790000 tons by 2019, and is expected to improve the ore grade of its Centinela and Zaldivar mines. Unlike most miners, they see a decline in ore grade.

In addition, BHP Billiton, the world's largest mining company, and British mining giant Anglo American released third-quarter copper production reports and forecasts for future copper production.

BHP Billiton

BHP Billiton had previously reported copper production for the third quarter, up 2 per cent to 409000 tons. Among them, the output of the Escondida (Escondida) copper mine was 295000 tons, an increase of 10 per cent over the same period last year. Production of the (Pampa Norte) copper mine in Bampa North fell 25 per cent to 43000 tons. The output of the (Olympic Dam) copper mine at Olympba fell 21 per cent to 33000 tons.

BHP also cut its full-year copper production forecast by about 3 per cent as key businesses in Australia and Chile shut down production, putting further pressure on global supply. At the same time, the company also cut its full-year target production for the year to June to 1.62 million metric tons to 1.71 million tons. BHP Billiton had expected the number of electric vehicles worldwide to climb to 140 million in 2035, compared with 1 million in the world, and the increase in the number of electric vehicles would significantly boost demand for copper. Copper prices are still expected to grow by more than 50 per cent by 2035.

Anglo-American resources

Anglo American reported last Tuesday that copper production rose 17 per cent to 171800 tonnes in the third quarter ended September 30, 2018 from a year earlier. Anglo American expects full-year copper production of 63-660000 tons.

Anglo's chief executive, Robben Fernandes, hinted that the company was conducting a drilling operation in Brazil and said large amounts of copper could be found on the edge of the Amazon rainforest. Fernandes is referring to a 19000-square-kilometer piece of land, the size of Israel, where the company has been exploring since July and has drilled six mines.

Anglo American copper production is expected to increase from about 579000 tons per year to 758000 tons per year in 2024.

Key Words:  Output  copper mine  SMM analysis 

[SMM Analysis] Global institutions report production expectations for next year copper supply growth may slow down

Translation 05:46:37PM Nov 22, 2018 Source:SMM

SMM, 22 Nov: due to the impact of large-scale mine strikes and other factors, global copper production fell sharply in 2017. SMM expects copper supply growth to increase to 3.3 percent in 2018 from minus 1.0 percent in 2017. Copper supply growth is expected to slow again to about 2.4 per cent in 2019, with mineral copper increasing by about 500000 tons. The main factor is Grasberg, the world's second-largest copper producer, which expects copper production to fall next year, mainly as a result of the transformation of mines. The largest increment is the Cobre Panama mine owned by First Quantum, which is expected to be 150000 tons.

As the mode of operation of the Grasberg copper mine in Indonesia is gradually shifting from open-pit mining to underground mining, according to SMM, Grasberg production will be greatly affected, which has long been expected by the market, but because the progress of underground mining is not controllable and the trend of prices is not clear. In the face of many disturbances, there is no exact reduction, 300000 tons of production reduction is expected to be pessimistic, SMM expects Grasberg to reduce production by 20-300000 metal tons in 2019. Many market participants believe that the copper market will face a shortage of supply.

Fitch: the steady growth of copper production in Chile in 2019 and the decline of ore grade is a cause for concern.

Fitch said in a recent report that Chile would achieve a steady production growth of 4 per cent next year because the risk of labour strikes would be reduced and mines would escalate, warning that falling ore grades pose a downside risk to its long-term forecasts. Fitch said Chilean copper production is expected to increase by 2 per cent to 5.4 million tons in 2018 as a result of increased production at major mines.

Despite the decline in ore grade, Codelco2018 copper production increased slightly in the first half of the year, up 2.8 per cent from the first half of 2017. Fitch stressed that the new Chuquicamata underground mine will support Codelco's copper production level. The underground part of the mine will initially increase land production in Chuquicamata, as the mine will shift to underground operations within the next decade. The current plan predicts that it will take seven years of growth before full production can be achieved. Once fully operational, the underground portion will produce 320000 tons of copper a year.

In addition, Fitch reported that the Michilla mine, owned by Haldeman Mining and to be restarted, showed an improvement in investor interest in Chilean mines. The mine will be restarted in 2019 and, as a medium-sized mine, will produce 170000 tons over the next decade. Antofagasta increased its copper production guidance from 705000 tons to 72.5 tons in 2018 to 750000 to 790000 tons by 2019, and is expected to improve the ore grade of its Centinela and Zaldivar mines. Unlike most miners, they see a decline in ore grade.

In addition, BHP Billiton, the world's largest mining company, and British mining giant Anglo American released third-quarter copper production reports and forecasts for future copper production.

BHP Billiton

BHP Billiton had previously reported copper production for the third quarter, up 2 per cent to 409000 tons. Among them, the output of the Escondida (Escondida) copper mine was 295000 tons, an increase of 10 per cent over the same period last year. Production of the (Pampa Norte) copper mine in Bampa North fell 25 per cent to 43000 tons. The output of the (Olympic Dam) copper mine at Olympba fell 21 per cent to 33000 tons.

BHP also cut its full-year copper production forecast by about 3 per cent as key businesses in Australia and Chile shut down production, putting further pressure on global supply. At the same time, the company also cut its full-year target production for the year to June to 1.62 million metric tons to 1.71 million tons. BHP Billiton had expected the number of electric vehicles worldwide to climb to 140 million in 2035, compared with 1 million in the world, and the increase in the number of electric vehicles would significantly boost demand for copper. Copper prices are still expected to grow by more than 50 per cent by 2035.

Anglo-American resources

Anglo American reported last Tuesday that copper production rose 17 per cent to 171800 tonnes in the third quarter ended September 30, 2018 from a year earlier. Anglo American expects full-year copper production of 63-660000 tons.

Anglo's chief executive, Robben Fernandes, hinted that the company was conducting a drilling operation in Brazil and said large amounts of copper could be found on the edge of the Amazon rainforest. Fernandes is referring to a 19000-square-kilometer piece of land, the size of Israel, where the company has been exploring since July and has drilled six mines.

Anglo American copper production is expected to increase from about 579000 tons per year to 758000 tons per year in 2024.

Key Words:  Output  copper mine  SMM analysis